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Tsys Gap Higher on BoE Bond Purchase Stability Program

US TSY FUTURES

Sharply off overnight lows, Tsys following surge higher in Gilts as the BoE just announced a temporary purchase program for Gilts and postponing sales in order to restore mkt functioning.

  • "These purchases will be strictly time limited. They are intended to tackle a specific problem in the long-dated government bond market. Auctions will take place from today until 14 October. The purchases will be unwound in a smooth and orderly fashion once risks to market functioning are judged to have subsided."
  • Heavy volumes as Tsy draw some sell pressure, 2Y futures tapped 102-23.88 (+8.75) slips to 102-21.88, yield curves bull steepening.

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